CD 9

(F. Easements; 2 and 3 [Rights and obligations of the owners of

the dominant and servient estates; Modes of extinguishment])
Case No. 3

a. Doctrine
Easements; Restrictions on the owner of the dominant estate on its
rights on the servient estate.
The owner of the dominant estate cannot violate any of
the following prescribed restrictions on its rights on the
servient estate, to wit: (1) it can only exercise rights
necessary for the use of the easement; (2) it cannot use
the easement except for the benefit of the immovable
originally contemplated; (3) it cannot exercise the
easement in any other manner than that previously
established; (4) it cannot construct anything on it which is
not necessary for the use and preservation of the
easement; (5) it cannot alter or make the easement more
burdensome; (6) it must notify the servient estate owner of
its intention to make necessary works on the servient
estate; and (7) it should choose the most convenient time
and manner to build said works so as to cause the least
convenience to the owner of the servient estate. Any
violation of the above constitutes impairment of the
easement.

b.Case Title
Goldcrest Realty Corporation v. Cypress Gardens Condominium
Corporation (G.R. No. 171072, April 7, 2009)

c.Facts
Petitioner Goldcrest Realty Corporation (Goldcrest) is the developer
of Cypress Gardens, a ten-storey building located at Herrera Street,
Legaspi Village, Makati City. On April 26, 1977, Goldcrest executed a
Master Deed and Declaration of Restrictions which constituted
Cypress Gardens into a condominium project and incorporated
respondent Cypress Gardens Condominium Corporation (Cypress) to
manage the condominium project and to hold title to all the common
areas. Title to the land on which the condominium stands was
transferred to Cypress under Transfer Certificate of Title No. S-
67513. But Goldcrest retained ownership of the two-level penthouse
unit on the ninth and tenth floors of the condominium registered under
Condominium Certificate of Title (CCT) No. S-1079 of the Register of
Deeds of Makati City. Goldcrest and its directors, officers, and
assigns likewise controlled the management and administration of the
Condominum until 1995.

Following the turnover of the administration and management of the

Condominium to the board of directors of Cypress in 1995, it was
discovered that certain common areas pertaining to Cypress were
being occupied and encroached upon by Goldcrest. Thus, in
1998, Cypress filed a complaint with damages against Goldcrest
before the Housing and Land Use Regulatory Board (HLURB),
seeking to compel the latter to vacate the common areas it allegedly
encroached on and to remove the structures it built thereon. Cypress
sought to remove the door erected by Goldcrest along the stairway
between the 8th and 9th floors, as well as the door built in front of the
9th floor elevator lobby, and the removal of the cyclone wire fence on
the roof deck. Cypress likewise prayed that Goldcrest pay damages
for its occupation of the said areas and for its refusal to remove the
questioned structures.

For its part, Goldcrest averred that it was granted the exclusive use of
the roof deck's limited common area by Section 4(c) of the
condominium's Master Deed. It likewise argued that it constructed the
contested doors for privacy and security purposes, and that,
nonetheless, the common areas occupied by it are unusable and
inaccessible to other condominium unit owners.

Upon the directive of HLURB Arbiter San Vicente, two ocular

inspections[5] were conducted on the condominium project. During the
first inspection, it was found that Goldcrest enclosed and used the
common area fronting the two elevators on the ninth floor as a
storage room. It was likewise discovered that Goldcrest constructed a
permanent structure which encroached 68.01 square meters of the
roof deck’s common area.

During the second inspection, it was noted that Goldcrest failed to

secure an alteration approval for the said permanent structure.

In his Decision dated December 2, 1999, Arbiter San Vicente ruled in

favor of Cypress. He required Goldcrest, among other things, to: (1)
remove the questioned structures, including all other structures which
inhibit the free ingress to and egress from the condominium's limited
and unlimited common areas; (2) vacate the roof deck's common
areas and to pay actual damages for occupying the same; and (3)
pay an administrative fine for constructing a second penthouse and
for making an unauthorized alteration of the condominium plan.

On review, the HLURB Special Division modified the decision of

Arbiter San Vicente. It deleted the award for actual damages after
finding that the encroached areas were not actually measured and
that there was no evidentiary basis for the rate of compensation fixed
by Arbiter San Vicente. It likewise held that Cypress has no cause of
action regarding the use of the roof deck's limited common area
because only Goldcrest has the right to use the same. The dispositive
portion of the decision reads:

“WHEREFORE, in view of the foregoing, the decision of the

office is modified as follows:

1. Directing respondent to immediately remove any or all

structures which obstruct the use of the stairway from the
eighth to tenth floor, the passage and use of the lobbies at
the ninth and tenth floors of the Cypress Gardens
Condominium; and to remove any or all structures that
impede the use of the unlimited common areas; and

2. Ordering the respondent to pay an administrative fine of

P10,000.00 for its addition of a second penthouse and/or
unauthorized alteration of the condominium plan.

All other claims are hereby dismissed.

SO ORDERED.”
Aggrieved, Cypress appealed to the Office of the President. It
questioned the deletion of the award for actual damages and argued
that the HLURB Special Division in effect ruled that Goldcrest could
erect structures on the roof deck's limited common area and lease
the same to third persons.

The Office of the President dismissed the appeal. It ruled that the
deletion of the award for actual damages was proper because the
exact area encroached by Goldcrest was not determined. It likewise
held that, contrary to the submissions of Cypress, the assailed
decision did not favor the building of structures on either the
condominium's limited or unlimited common areas. The Office of the
President stressed that the decision did not only order Goldcrest to
remove the structures impeding the use of the unlimited common
areas, but also fined it for making unauthorized alteration and
construction of structures on the condominium's roof deck. The
dispositive portion of the decision reads:

“WHEREFORE, premises considered, the appeal of

Cypress Gardens Corporation is hereby dismissed and
the decision of the Board a quo dated May 11, 2000 is
hereby AFFIRMED.”

Cypress thereafter elevated the matter to the Court of Appeals, which

partly granted its appeal. The appellate court noted that the right of
Goldcrest under Section 4(c) of the Master Deed for the exclusive
use of the easement covering the portion of the roof deck
appurtenant to the penthouse did not include the unrestricted right to
build structures thereon or to lease such area to third persons. Thus
the appellate court ordered the removal of the permanent structures
constructed on the limited common area of the roof deck. The
dispositive portion of the decision reads:

“WHEREFORE, the petition is PARTIALLY GRANTED.

The Decision of the Office of the President dated June
2, 2003 is hereby AFFIRMED with modification.
Respondent Goldcrest Realty Corporation is further
directed to remove the permanent structures
constructed on the limited common area of the roof
deck.

SO ORDERED.”
The parties separately moved for partial reconsideration but both
motions were denied.

c. Issues

1. Whether or not the Appellate Court erred in ruling that

Goldcrest built an office structure on a supposed encroached
area in the open space of the roof deck.
2. Whether or not the Appellate Court erred in ruling that
Petitioner impaired the easement on the portion of the roof
deck designated as a limited common area.

d.Held

Anent the first issue, Goldcrest contends that since the areas it
allegedly encroached upon were not actually measured during the
previous ocular inspections, the finding of the Court of Appeals
that it built an office structure on the roof deck's limited common
area is erroneous and that its directive "to remove the permanent
structures constructed on the limited common area of the roof
deck” is impossible to implement.

On the other hand, Cypress counters that the Court of Appeals'

finding is correct. It also argues that the absence of such
measurement does not make the assailed directive impossible to
implement because the roof deck's limited common area is
specifically identified by Section 4(c) of the Master Deed, which
reads:

“Section. 4. The Limited Common Areas. Certain parts of

the common areas are to be set aside and reserved for
the exclusive use of certain units and each unit shall have
appurtenant thereto as exclusive easement for the use of
such limited areas:

x x x shaded red in sheet 10 of Annex "B" by the

Penthouse unit on the roof deck.”

We rule in favor of Cypress. At this stage of the proceedings, the

failure to measure the supposed encroached areas is no longer
relevant because the award for actual damages is no longer in
issue. Moreover, a perusal of the records shows that the finding of
the Court of Appeals that Goldcrest built an office structure on the
roof deck's limited common area is supported by substantial evidence
and established facts, to wit: (1) the ocular inspection reports
submitted by HLURB Inspector Edwin D. Aquino; (2) the fact that the
second ocular inspection of the roof deck was intended to measure
the actual area encroached upon by Goldcrest; (3) the fact that
Goldcrest had been fined for building a structure on the limited
common area; and (4) the fact that Goldcrest neither denied the
structure's existence nor its encroachment on the roof deck's limited
common area.

Likewise, there is no merit in Goldcrest's submission that the failure

to conduct an actual measurement on the roof deck's encroached
areas makes the assailed directive of the Court of Appeals impossible
to implement. As aptly pointed out by Cypress, the limited common
area of the roof deck is specifically identified by Section 4(c) of the
Master Deed.

Anent the second issue, Goldcrest essentially contends that since the
roof deck's common limited area is for its exclusive use, building
structures thereon and leasing the same to third persons do not
impair the subject easement.

For its part, Cypress insists the said acts impair the subject easement
because the same are already beyond the contemplation of the
easement granted to Goldcrest.

The question of whether a certain act impairs an easement is

undeniably one of fact, considering that its resolution requires us to
determine the act's propriety in relation to the character and purpose
of the subject easement. In this case, we find no cogent reason to
overturn the similar finding of the HLURB, the Office of the President
and the Court of Appeals that Goldcrest has no right to erect an office
structure on the limited common area despite its exclusive right to
use the same. We note that not only did Goldcrest's act impair the
easement, it also illegally altered the condominium plan, in violation
of Section 22 of Presidential Decree No. 957.

The owner of the dominant estate cannot violate any of the following
prescribed restrictions on its rights on the servient estate, to wit: (1) it
can only exercise rights necessary for the use of the easement; (2) it
cannot use the easement except for the benefit of the immovable
originally contemplated; (3) it cannot exercise the easement in any
other manner than that previously established; (4) it cannot construct
anything on it which is not necessary for the use and preservation of
the easement; (5) it cannot alter or make the easement more
burdensome; (6) it must notify the servient estate owner of its
intention to make necessary works on the servient estate; and (7) it
should choose the most convenient time and manner to build said
works so as to cause the least convenience to the owner of the
servient estate. Any violation of the above constitutes impairment of
the easement.

Here, a careful scrutiny of Goldcrest's acts shows that it breached a

number of the aforementioned restrictions. First, it is obvious that the
construction and the lease of the office structure were neither
necessary for the use or preservation of the roof deck's limited area.
Second, the weight of the office structure increased the strain on the
condominium's foundation and on the roof deck's common limited
area, making the easement more burdensome and adding
unnecessary safety risk to all the condominium unit owners. Lastly,
the construction of the said office structure clearly went beyond the
intendment of the easement since it illegally altered the approved
condominium project plan and violated Section 4 of the
condominium’s Declaration of Restrictions.

“WHEREFORE, the petition is DENIED for lack of merit. The assailed

Decision dated September 29, 2005 of the Court of Appeals in CA
G.R. SP. No. 79924 is hereby AFFIRMED. Costs against the
petitioner.”